Other int an g ible assets (IAS 36 and IAS 38) Other int an g ible assets are recogniz ed if it is probable that the e xpected future economic benefts that are at tribut able to the asset will fo w to the Group and that the cos t of the asset can be measured reliably . Other int an g i - ble assets include the tr ade mark Securit as, which is re gar ded to ha v e an indefnite useful life . The tr ademark has been capit aliz ed only in those cases where it has been acquired from a thir d part y . This tr ademark is not amortiz ed but tes ted annually for impairment . Other items in other int an g ible assets ha v e a defnite useful life . These assets are recogniz ed at cos t and subsequently carried at cos t less accumu - lated amortization and an y accumulated impairment losses. Linear depreciation is used for all asset classes, as follo ws: Soft w are licenses 12.5–33.3 percent Other int an g ible assets 6.7–33.3 percent R ent al rig hts and similar rig hts are amortiz ed o v er the same period as the underlyin g contr actual period. T an g ible non-current assets (IAS 16 and IAS 36) T an g ible non-current assets are recogniz ed at cos t and subsequently carried at cos t less accumulated depreciation accor din g to plan and an y accumulated impairment losses. Depreciation accor din g to plan is based on his torical cos t and the useful life of the asset . Linear depreciation is used for all asset classes, as follo ws: M achiner y and equipment 10–25 percent Buildin g s and land impro v ements 1.5–4 percent L and 0 percent Impairment (IAS 36) Assets that ha v e an indefnite useful life are not subject to amortization and are tes ted annually for impairment . Assets that are subject to depreciation or amortization are re view ed for impairment whene v er e v ents or chan g es in circums t ances indicate that the carr yin g amount ma y not be reco v er able . An impairment loss is recogniz ed in the amount b y which the asset’ s carr yin g amount e x ceeds its reco v er able amount . The reco v er able amount is the hig her of an asset’ s fair v alue less cos ts to sell and v alue in use . v alue in use is measured as e xpected future discounted cash fo ws. The calculation of v alue in use necessit ates that a number of assumptions and es timates are made . The main assumptions concern the or ganic sales gro wth, the de v elopment of the oper atin g mar g in and the necessar y oper atin g capit al emplo y ed requirement as w ell as the rele v ant W A C C (W eig hted A v er a g e Cos t of Capit al) r ate used to discount future cash fo ws. F or the purposes of impairment tes tin g, assets are grouped at the lo w es t le v els for which there are separ ately identifable cash fo ws (C GU). Pre viously recogniz ed impairment losses, with the e x ception of impair - ment losses related to g oodwill, are re v er sed only if a chan g e has occurred re gar din g the assumptions that formed the basis for determinin g the reco v - er able v alue when the impairment loss w as recogniz ed. If this is the case a re v er sal of the impairment loss is carried out in or der to increase the book v alue of the impaired asset to its reco v er able v alue . A re v er sal of a pre vious impairment loss is only recogniz ed to the e xtent that the new book v alue does not e x ceed what should ha v e been the book v alue (after depreciation and amortization) if the impairment loss had not been recogniz ed in the fr s t place . Impairment losses related to g oodwill are ne v er re v er sed. Leasin g contr acts (IAS 17) When a leasin g contr act means that the Group , as the lessee , essentially receiv es the economic benefts and bear s the economic risk associated with the leased asset – termed fnance leases – the asset is recogniz ed as a non- current asset in the consolidated balance sheet . The net present v alue of the correspondin g obligation to pa y leasin g fees in the future is recogniz ed as a liabilit y . In the consolidated s t atement of income , leasin g pa yments are divided into depreciation and interes t . The Group has no signifcant fnance leases where it is the lessor . Oper ational leases, where the Group is the lessee , are recogniz ed as an oper atin g e xpense on a linear basis o v er the period of the lease in the consoli - dated s t atement of income . In cases where the Group is the lessor , re v enue is recogniz ed as sales on a linear basis. Depreciation is recogniz ed under oper - atin g income . Accounts receiv able Accounts receiv able are accounted for at nominal v alue net after pro visions for probable bad debt . Probable and recogniz ed bad debt losses are included in the line production e xpenses in the s t atement of income . Pa y - ments receiv ed in adv ance are accounted under other current liabilities. In v entories (IAS 2) In v entories are v alued at the lo w er of cos t and net realizable v alue . Cos t is determined accor din g to the fr s t -in, fr s t -out principle . The cos t of fnished g oods and w ork in progress comprises material, direct labor and other direct cos ts. Net realizable v alue is the es timated sellin g price in the or dinar y cour se of business, less applicable v ariable sellin g e xpenses. The necessar y deductions for obsolescence are made . Financial ins truments (IFRS 7 / IAS 32 / IAS 39) A fnancial ins trument is an y contr act that g iv es rise to a fnancial asset of one entit y and a fnancial liabilit y or equit y ins trument of another entit y . The defnition of fnancial ins truments thus includes equit y ins truments of another entit y but also for e xample contr actual rig hts to receiv e cash such as accounts receiv able . Financial ins truments are recor ded initially at fair v alue with the subse - quent measurement dependin g on the designation of the ins trument . The Group designates its fnancial ins truments in the follo win g cate g ories: · Financial assets or fnancial liabilities at fair v alue throug h proft or loss (includin g deriv ativ es not designated as hed g in g ins truments) · Loans and receiv ables · Held-to-maturit y in v es tments · A v ailable-for -sale fnancial assets · f inancial liabilities designated as hed g ed item in a fair v alue hed g e · Other fnancial liabilities · Deriv ativ es designated for hed g in g The designation depends on the purpose for which the fnancial ins trument is acquired. M ana g ement determines the designation of its fnancial ins tru - ments at initial recognition and re-e v aluates this designation at each report - in g date . M os t of the Group ’ s current assets are loans and receiv ables (includin g accounts receiv able and mos t other current receiv ables). Financial assets or fnancial liabilities at fair v alue throug h proft or loss (with e x ception for deriv ativ es), held-to-maturit y in v es tments and a v ailable-for -sale fnancial assets are normally cate g ories in which the Group has no or v er y limited positions. f inancial liabilities designated as the hed g ed item in a fair v alue hed g e include both lon g -term and short -term loans designated as hed g ed items that are hed g ed efectiv ely via deriv ativ es designated for hed g e accountin g. Other fnancial liabilities comprise all other fnancial liabilities includin g such items as accounts pa y able and other current liabilities and also an y lon g -term and short -term loans not included in the cate g or y fnancial liabilities designated for hed g in g. 79 Annual R eport Notes and comments to the consolidated fnancial s t atements Securit as Annual R eport 2012